Originally Posted by tennisguru

I think it has to fully one way or the other for IRS purposes. If we want to put some of it into our 401k then the whole amount has to count towards the contribution income limits. Since we're not getting company DC on it that sets us back as someone could hit the 330k cap on earnings before getting their full 66k 415c allotment in there. Not being able to add money to your 401k keeps it cleaner since that money also won't count towards the 330k income cap on contributions.